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ONEOK Partners third quarter results

Hydrocarbon Engineering,

ONEOK Partners, L.P. has announced third quarter (Q3) net income of US$ 167.2 million (32 cents/unit), which includes a noncash impairment charge of US$ 76.4 million (31 cents/unit), in the natural gas gathering and processing segment. In the third quarter 2013, net income attributable to ONEOK Partners was US$ 216.3 million (64 cents/unit).

The noncash impairment charge, which is included in equity earnings from investments, resulted from the partnership’s equity investment in Bighorn Gas Gathering, a natural gas gathering system located in the coal bed methane area of the Powder River Basin in Wyoming, where dry natural gas volumes continue to decline.

Q3 adjusted earnings before interest, taxes, depreciations and amortization (adjusted EBITDA) were US$ 388.6 million, a 17% increase compared with US$ 331.9 million in the third quarter 2013.

According to ONEOK, Q3 results reflect higher natural gas volumes gathered, processed and sold, and higher NGL volumes sold in the natural gas gathering and processing segment, and higher margin NGL volumes from connections with new natural gas processing plants in the Williston Basin and Mid-Continent regions in the natural gas liquids segment.

Q3 distributable cash flow (DCF) was US$ 293.3 million, providing 1.05 times coverage of the cash distributions that will be paid, a 13% increase compared with third quarter 2013 DCF of US$ 259.1 million that provided 1.14 times coverage.

Terry K. Spencer, President and CEO of ONEOK Partners, commented: “Completed capital growth projects in our natural gas gathering and processing, and natural gas liquids segments continue to add incremental earnings and distributable cash flow, and increased natural gas volumes on our systems throughout our operating areas.

“With our recent announcements of new natural gas processing facilities in North Dakota, Wyoming and Oklahoma, we continue to add natural gas and natural gas liquids infrastructure to better serve our customers and producers. And, our recently announced acquisition of NGL assets – the West Texas LPG and Mesquite NGL pipelines – in the Permian Basin gives us a significant NGL presence in yet another highly productive NGL-rich region”.

Year to date net income attributed to ONEOK Partners was US$ 647.1 million, or US$ 1.65 units, which includes the noncash impairment charge of US$ 76.4 million related to ONEOK Partners’ equity investment in Bighorn Gas Gathering, compared with US$ 575.3 million , or US$ 1.68/unit, in the same period last year.

Year to date 2014 adjusted EBITDA was US$ 1.14 billion, a 26% increase compared with US$ 907.4 million in the same period last year.

DCF for the first nine months of the year was US$ 863.5 million, providing 1.11 times coverage, a 23% increase compared with US$ 704.2 million for the same period last year, providing coverage of 1.04 times.

Adapted from a press release by Emma McAleavey

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